Maruti vs Grasim Q3 FY25

Maruti Suzuki reported Q3 FY25 net sales of INR 36,800 crore (+15.5% YoY) and PAT of INR 3,525 crore (+12.6% YoY), driven by festive demand and record exports of 99,020 units (+38% YoY). Domestic sales grew 8.7% YoY to 466,993 units, with rural retail up 15% vs urban 2.5%. The company unveiled the e VITARA EV with 500+ km range, targeting exports to 100 countries and aiming to be India's largest EV manufacturer within the first year. Margins faced headwinds from higher sales promotion (+20bps QoQ), ad spends (+40bps), and adverse forex (-20bps), partially offset by favorable commodities (+40bps) and operating leverage (+30bps). Management expects Q4 retail growth of ~3.5% and noted subdued demand in entry-level segments. Risk: sustained weakness in small cars and competitive intensity from capacity expansions.

Guidance read

Q4 FY25 retail growth ~3.5%: Management expects retail sales growth in Q4 to follow the 9-month trend of ~3.5%. Price hike of ~30 bps on net sales from Feb 2025: Small price increase announced to cover inflationary pressures. Kharkhoda plant to start operations in Q4 FY25: The upcoming greenfield plant at Kharkhoda is expected to begin operations within Q4 FY25. e VITARA production to begin soon; aspire to be largest EV manufacturer in India within first year: Production of the e VITARA EV will start soon, with ambition to become India's largest EV maker within the first year of production.

Risk read

Key risks include Subdued demand in entry-level segments — Entry hatchbacks saw degrowth, mid-hatch flat, while premium hatch grew. Weakness in lower segments remains a challenge.; EV profitability unlikely to match ICE in near term — Management acknowledged that EV profitability per vehicle will not match ICE for a long time due to higher costs and government support needed.; Competitive intensity from capacity expansions — Multiple OEMs are expanding capacity, which could increase competitive intensity and pressure margins.; CAFE 3 norms uncertainty — CAFE 3 norms are yet to be announced; management did not provide specific EV penetration targets, relying on technology mix agility..

Promise ledger

Of 3 tracked promises, management 0 met, 0 close, 3 missed.

Grasim's Q3 FY25 consolidated revenue grew 9% YoY to INR 34,793 crore, marking the 17th consecutive quarter of YoY growth. However, consolidated EBITDA fell 9% YoY to INR 4,668 crore, dragged by lower cement profitability and initial investments in the paints business (Birla Opus). The paints segment is gaining market share, exiting the year at high-single-digit share, with four plants commercialized and a sixth expected in Q1 FY26. The chemicals business saw EBITDA up 25% YoY on higher caustic soda realizations, though chlorine remained negative. VSF volumes were flat due to production loss, but lyocell expansion of 110 KTPA was approved. The B2B e-commerce platform Birla Pivot continues to scale. Net debt-to-EBITDA is guided to stay within 3-3.5x. Key risk: sustained input cost inflation in VSF and chemicals may pressure margins if price pass-through remains incomplete.

Guidance read

Paints breakeven within three years of full-scale operations: Birla Opus targets breakeven within three years after all plants are fully operational, with first year being the heaviest investment period. Net debt-to-EBITDA not to exceed 3-3.5x: Management reiterated a net debt-to-EBITDA ceiling of 3-3.5x, which will guide future capex decisions. Cement capacity of 200 MTPA by FY27: UltraTech remains on track to achieve domestic grey cement capacity of over 200 million tonnes per annum by FY27. Lyocell first phase 55 KTPA by mid-2027: Board approved 110 KTPA lyocell capacity at Harihar; first phase of 55 KTPA to be executed by mid-2027 at INR 1,350 crore investment.

Risk read

Key risks include Input cost inflation in VSF and chemicals — Key inputs like pulp, caustic soda, and sulfur have risen over 10%, and price pass-through has been incomplete, pressuring margins.; Chlorine negative realization persisting — Chlorine realization remained negative at INR 7,000-7,500/ton in Q3, and Q4 is expected to be worse, offsetting caustic gains.; Paints market slowdown — The decorative paints market was flat to marginally negative in Q3, and a sustained slowdown could delay Birla Opus's breakeven timeline.; Epoxy margins under pressure from raw material volatility — BPA and ECH prices rose ~13% QoQ, and not all cost increases could be passed on, impacting epoxy margins..

Promise ledger

Of 2 tracked promises, management 0 met, 0 close, 2 missed.